Tuesday, August 03, 2010

Water for the people, not for profit

In his recent first-ever state of the nation address or SONA, President Noynoy Aquino ridiculed the leadership of the Metropolitan Waterworks and Sewerage System (MWSS) for giving themselves fat salaries, bonuses, allowances and other incentives while MWSS gathers arrears in payments of pensions for their retired employees. This was happening, the President noticed, while the people lined up for water because of the growing water shortage.

Aquino further decried the decision of MWSS to build homes for its top officials on land earmarked for planting of trees in order to protect the La Mesa Dam watershed.

Yet, according to the President, his hands were tied. He can’t remove these officials because they were among the midnight appointees of former President Gloria Arroyo.

Speaking of “midnight deals,” newly-minted Secretary of Public Works Rogelio Singson was linked to a deal between the Philippine Amusement and Gaming Corporation (Pagcor) and Maynilad Water Services Inc. for a water concession that would have deprived the government of at least 3.6 billion pesos in water fees.

Singson was president of Maynilad when the supposed deal was brokered and approved days before he was appointed Public Works Secretary by President Aquino. He was also the former top honcho of MWSS prior to its privatization. President Aquino even praised Singson during his state of the nation address for quickly resolving the water crisis in Metro Manila.

Two things are clear about Noynoy Aquino’s appointment of Singson to a cabinet post and the issue of water supply in general.

First, Aquino’s swift defence of Singson’s alleged misstep flies on his face in view of his lofty mission to instil transparency and honesty in government. Perhaps Aquino’s entreaty that all the MWSS officials who have enriched themselves should voluntarily resign if they have any shame also applies to Singson. Unless, of course, the President operates under a double standard of morality like his predecessor.

Second, the Pagcor-Maynilad deal for a water concession for the Bagong Nayong Pilipino Entertainment City in Parañaque City is unambiguous proof that corporate control over water resources favours big business and the rich at the expense of the impoverished majority of families who direly need water but cannot afford to pay the high rates for water services.

While President Aquino has noticed the highly shameful paychecks of MWSS officials, he has, on the other hand, by either negligence or ignorance, failed to see that the scarcity of water is felt mainly by the poor and not by the rich. In discussions about the water crisis, the focus seems directed solely on rapidly growing population, pollution and destruction of freshwater resources, and climate change as the most critical contributors to the worsening water shortage. Seldom has the reality of the crisis of water ever become the central topic for debate: that majority of the poor people have no access to water while most of the water goes to the rich.

Unequal access to water is not only the consequence of widening disparity in incomes. Corporate control over water resources has exacerbated this inequity.

In Metro Manila, for example, both Maynilad and Manila Water which took over the MWSS have increased water rates by as much as 400 per cent between August 1997 and January 2007. With this huge hike in water rates combined with the rise in the cost of other basic good goods and services, many families can hardly afford water services today. Only rich families can now afford to have a steady supply of water for their needs.

Private corporations also directly compete with the people for control and use of available freshwater resources. For instance, Benguet Mining, a U.S. mining firm, has also ventured into the water business: it holds about 65 water permits covering major creeks, springs and rivers in Itogon in Benguet province that communities use for their domestic and agricultural needs. Benguet Corp. has already compromised the people’s source of fresh mountain water because of its Danum bottled-mineral water project.

In San Pablo City, Laguna, farmers and residents complain of declining water availability and blame the operation of a mineral water plant by Nestle Philippines, Inc. The recent Pagcor-Maynilad concession deal only shows that private business gets top priority in the supply of water.

Water, according to Fortune magazine, is the best investment sector for the century. The magazine dubbed water “the oil of the 21st century.” It is estimated that the value of global “water industry” is somewhere between 1-3 trillion dollars. Foreign multinational corporations now directly operate water supply and sanitation systems and most of them have already penetrated the local water sector. As the global water crisis deepens, the private water industry, dominated by a handful of multinationals and their subsidiaries, stands to benefit.

These multinational corporations and other proponents of water privatization argue that the private sector can deliver basic goods and services more efficiently and at lower costs than the public sector.

For poor and debt-strapped countries, water privatization was made a condition for borrowing money from the World Bank and the International Monetary Fund (IMF). The Philippines is one among many poor countries with huge debts subjected to this requirement.

Privatization of water in the Philippines started during the administration of former President Fidel V. Ramos. The inability of the Metropolitan Waterworks and Sewerage System (MWSS) to expand its services to the growing population became the impetus to privatize.

Private participation was implemented through concessions, in which the concessionaires were given the task to operate and manage the facilities, while the MWSS maintained ownership of the infrastructure.

The service area was divided into two zones. Maynilad Water Services, Inc., a joint venture by the world’s second largest water transnational operation Suez of France and the Filipino Benpres Holding was awarded the concession contract for the West Zone. The East Zone went to Manila Water Company, Inc., a consortium of the Filipino Ayala Corporation and the British United Utilities and the U.S. company Bechtel.

In reality, there is little evidence to support the argument that privatization actually benefits consumers — particularly the poor — by improving access and lowering costs. Quite often, water prices increase and quality problems follow on the heels of privatization.

On the contrary, water privatization has compounded the critical state of our water resources. Seven years after privatization of water facility in Metro Manila, consumers still have to cope with no or inadequate water, contaminated water, and rising water hikes. The government under Gloria Arroyo failed to bring the concessionaires to comply with their commitments, chose not to bail out Maynilad Water Services which became bankrupt, and continued to support the privatization of local water districts in several towns and districts nationwide. While putting a large amount of our precious water resources in the hands of big business and transnational corporations, privatization of water has become the main cause of the water shortage for the majority of our population.

The failure of water privatization hangs like a noose waiting to be tightened, and it’s just a matter of time before we experience the consumer rebellions that happened in Bolivia against handing control of water over to foreign corporations. These two revolts over water in Bolivia sent a strong and clear message to the World Bank that the people did not choose to privatize their public water systems. It was a choice forced upon them, as it has been in many poor nations around the world.

In El Alto, the people complained that the French Suez/World Bank privatization left tens of thousands of poor families with no access to water whatsoever. The Bolivian president had no choice but to cancel the contract.

In Cochabamba, Bechtel Corporation and the Abengoa Corporation of Spain imposed rate increases of double and more for poor water users. Martial law had to be declared to save the companies’ contract, but the people staged protest strikes, roadblocks and other forms of civil disobedience that effectively shut down the city, forcing the government to restore the people’s water rights.

The crisis of water, whether in the Philippines or worldwide, is defined by its result: majority of the poor people have no access to water while most of the water goes to the rich and the profits to big foreign corporations. It is not simply an issue of overpopulation, denudation of forests and natural watersheds, pollution, climate change, and even government corruption. Globalization and its emphasis on the forces of the free market with its preoccupation for profit cannot be expected to be responsive to public good and general welfare.